Any reasonable man would admit that material changes in a
country's political state and high profits in business always
go hand in hand. For the last few years, this hypothesis has not
been more proven anywhere in the world than it has been in Northern
Iraq. As the part of the country which was least affected by the
American occupation, Northern Iraq has been in a phase of
reconstruction and booming trade for almost a decade.
Turkish businessmen have incontestably been playing a major role
in the aforementioned economic development. Nowadays, wherever you
go in Northern Iraq, a strong Turkish presence is easily
recognized, especially in construction projects. Even Ibrahim
Tatlises, a famous Turkish singer well-known for his oriental
melodies and tenor voice, embarked on a huge construction project
in Erbil in 2010. Other than construction, commodity trade is also
very active as almost everything is imported. Another sign of
Northern Iraq's skyrocketing development is the fact that major
Turkish banks have recently made applications for establishing
branches in cities such as Erbil. The state-owned Turkish
Airlines' application for launching direct flights to Erbil is
Considering the above, a main question comes to mind: What makes
Northern Iraq so attractive in terms of business? Below are the
main reasons for the latter:
Lack of regulation: As known, Northern Iraq is
relatively independent from the rest of the country. It has a
separate local government which is quite busy enacting new laws all
the time. Despite the latter, there is still a huge gap in terms of
regulation, which whets investors' appetites. Being a symbol of
pure capitalism, deregulation has been quite popular in the West
for years. Well, Northern Iraq is far ahead the West in terms of
deregulation because there is simply no sufficient regulation in
many fundamental areas.
Rich local population: Cities like Erbil are
to be completely rebuilt and home to thousands of wealthy families
who want to get rid of bad war memories as soon as possible, live
in beautiful houses, wear branded clothes and thus who are ready to
spend much money in realizing these wishes.
Gateway to Iranian market: Maybe the most
unheard but the primary reason for Northern Iraq being so important
is its Iranian border. Most countries in the world are banned from
exporting directly to Iran due to the UN embargo. Therefore,
companies who want to export to Iran first export to Iraq and then
arrange the shipment of their goods to Iran as a means of
circumventing the embargo.
Despite the aforesaid, doing business in Iraq is not always
easy. Having good local connections is key to seamless business
conduct. Consequently, when investing in Northern Iraq, it is very
important to hire "the right guy". Turkish companies,
which want to establish a presence -either a branch or a separate
company- in Northern Iraq, should particularly prefer to work with
Turkish law firms with a presence in Iraq because communication
with a local lawyer usually becomes a huge obstacle in start-up
A dozen of documents are required from Turkish companies for
establishing a branch in Erbil or Suleimaniyah. Since Iraq is still
not a party to La Haye Convention of 5 October 1961, all of the
said documents are first to be translated and notarized, then
approved by governorship in Turkey, then approved by the Turkish
Ministry of Foreign Affairs in Ankara and finally approved by the
Iraqi Embassy in Ankara. Once the approval process is completed,
the documents are sent to local Iraqi lawyers who submit an
application to the Chamber of Commerce for branch establishment.
Once the required documents arrive at Iraq, the establishment of
the branch takes 10 to 12 business days.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
A trustee in bankruptcy's rights to obtain a possession order and order for sale against a bankrupt's property will not be suspended indefinitely even where there are exceptional circumstances.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).